A dangerous situation brewing

THE FIGURE “R151 000 000 000” has many zeroes. But R151 billion is what our country will pay out in the current financial year for social grants. It includes money for, among others, child support, foster care, disability, older persons and war veterans.

It’s honourable to give money to those who don’t have. For most of the 17 million social grant beneficiaries it’s the only money they have for basics like food, housing, electricity and water.

That having been said, it’s not much money. If it’s the only income source it won’t ensure a decent life. The most you’d get for an old-age grant is R1 620 a month, and R380 for a child support grant.

In the next two to three years, the number of people on social grants is expected to increase to more than 18 million. It will then cost us about R175bn a year.

This week it emerged there were more people collecting social grants than working – 17 million people received social grants while 15.5 million were in formal jobs. The information comes from research conducted by the South African Institute of Race Relations.

Clearly, it isn’t a situation that’s sustainable. With our economy in a technical recession and labelled junk by two of the three main global ratings agencies, money is leaving our country rather than coming in. As a result, more jobs will probably be lost. That’s going to make it more difficult for the government to raise enough taxes to pay social grants in the coming years.

The ANC should take note of the situation. While many people have lost faith in theparty, more would do so if they don’t receive their social grants.

The party should make job creation and economic growth its main focus rather than who will succeed President Jacob Zuma as president of the ANC later this year. Given the precarious economic situation we find ourselves in, there might not be much to inherit.